Proposed new loan facilities

RNS Number : 8088C

Infoserve Group PLC

20 November 2009

 



Infoserve Group Plc

Proposed new loan facilities and conversion of debt into equity

Infoserve Group Plc ("Infoserve" or the "Company") is pleased to announce that it has reached agreement in principle with David Hood, the Company's major shareholder and a non-executive director of the Company, on the terms by which David Hood will provide additional funding for Infoserve and for the conversion of part of the Company's existing indebtedness to David Hood into new equity in the Company (the "Proposals").  The Proposals are subject to the negotiation and execution of legally binding contractual documentation.  A further announcement will be made when these agreements have been entered into.  

Under the Proposals, David Hood will provide additional funding to the Company amounting to £0.8 million, comprising a loan, which would be available for immediate drawdown, of £0.55 million and a further facility of £0.25 million to be made available in the event of the Company's existing overdraft facility being withdrawn.  The interest rate on both the new loan and the further facility would be 10% per annum.  In addition, David Hood has agreed to the continued deferment of payments due to himself and his associate companies, amounting to £0.30 million and the writing off of other sundry trading liabilities amounting to £50,000.  

These new funding arrangements will enable the Group to continue to fund its ongoing and improving trading activities and to pursue other growth opportunities available to it.

As part of the Proposals, the Company is proposing to issue 40 million new ordinary shares of 5p each in the capital of the Company ("Ordinary Shares") to David Hood at an issue price of 5p per share in satisfaction of loans to the value of £2 million, currently owing by the Company to David Hood.

The effect of the Proposals will be to increase David Hood's interest in the ordinary share capital of the Company from 46.86% to 82.84% and to reduce the value of the loans outstanding from David Hood to the Company, which at 31 October 2009 amounted to £3.52 million, by £1.45 million (or £1.2 million if the further facility is taken up).

The Company intends to seek a waiver from the Panel on Takeovers and Mergers of the obligation that would otherwise arise, as a result of the issue of the new Ordinary Shares, for David Hood to make an offer to acquire all of the Ordinary Shares not already owned by him.  If granted, any such waiver would be subject to approval of independent shareholders.  

A circular setting out details of the Proposals and convening a General Meeting of the Company for this purpose will be sent to shareholders as soon as legally binding contracts have been entered into.

For further information, please contact:

Infoserve Group plc Steve Barnes, Chief Executive [e-mail]	www.infoservegroup.com Tel:  [phone]
Jonathan Simpson, Finance Director [e-mail]	Tel:  [phone]
Nominated Adviser WH Ireland Limited Robin Gwyn	Tel:  [phone]

 

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